Snyder's stance against funding Hutzel confuses backers

Gov. Rick Snyder wants the state out of the business of subsidizing Hutzel Women's Hospital in Detroit, but that stance is confusing proponents of the funding because the hospital is a leader in the fight to reduce the state's infant mortality rate — a goal Snyder continues to champion.

Snyder did not include $6.7 million in state funding for Hutzel — typically given in recognition of the hospital's high volume of births and leadership in maternal-fetal medicine — in the budget he signed into law last year that is in effect through the end of September.

Why the shift?

The governor's office attributes the change to the state's expansion of Medicaid, ownership changes at the hospital and the state not putting restrictions on what the Hutzel funding was used for.

The Detroit Medical Center has been lobbying for more than a year for the state to put the funding back in the budget. When combined with $13.3 million in federal matching funds, the state funds bring in $20 million to the DMC, and have for the past 10 years.

Hutzel and Wayne State University are also home to the National Institutes of Health Perinatology Research Branch.

"We're the epicenter for this fight and research in the country," said Conrad Mallett Jr., DMC's chief administration officer. "It is amazing to us that we're having this discussion with a governor who has obviously been so attuned to the health care needs of this community."

Snyder's Press Secretary Sara Wurfel said the governor has placed significant priority on addressing infant mortality. It was something he brought up in his first State of the State address in 2011 and further outlined in a special message on health and wellness. While Snyder permitted the funding earmark for two years into DMC ownership by Vanguard Health Systems, the administration decided it was time to phase it out.

Wurfel said the Department of Community Health and the Department of Human Services are still working with organizations, especially in Detroit, on the issue.

She said the Hutzel's ownership changes have changed the conversation about state funding. In 2011, DMC was acquired by the for-profit Vanguard . Last year, Vanguard was acquired by Tenet Healthcare Corp. Providing unrestricted funding to a private enterprise as part of its annual budget is "not typically how the state does or should operate," she said.

But Mallett said at the Michigan Economic Development Corp. that businesses are still given tax dollars to entice them to expand or move into the state.

"The state of Michigan does that every day," Mallett said.

Wurfel also said with the expansion of Medicaid, it is expected that Tenet would see additional funding resources as more people will have access to Medicaid coverage.

Mallett said pregnant women and children were already covered under the state's MIChild insurance program, and said the expansion of Medicaid would not bring in the level of revenue the administration claims.

In order for the DMC to receive the federal matching funds, the initial funding has to come from the state, Mallett said. It cannot put up the money itself to receive the federal funds.

One plan that would have the DMC provide the state contribution funds up front but then refund the money to the health system wouldn't work because it is illegal per federal law, said Kurt Weiss, spokesman for the Department of Technology, Management and Budget.

A last hope?

A supplemental funding bill, Senate Bill 608, has been sent to a conference committee.

It's possible Hutzel funding could be packaged along with additional road funding and other items the governor does support, and that he will end up signing it in lieu of a line item veto.

Sen. Roger Kahn, R-Saginaw Township, a cardiologist and chairman of the Senate Appropriations Committee, was appointed to the six-member conference committee. He said Snyder has spoken often of wanting to reduce the state's infant mortality rate, which, at 7.3 deaths per 1,000 live births, is higher than the national average of 6.3.

"This is part of being able to do that," Kahn said.

The hospital delivers more than 4,500 at-risk babies annually, according to the DMC.

The Perinatology Research Branch was granted a 10-year, $165.9 million contract extension last year to continue its work at Hutzel to reduce preterm births.

Without the money

Mallett said if the money does not end up in the budget, it will not result in cutting services at Hutzel for women or babies. But the entire DMC would have to absorb a $20 million cut.

It would put on hold the rollout of some community outreach programs to reduce the state's infant mortality rate.

Mallett said the DMC will discuss what to do in future years so there isn't an annual fight.

"We need to think about what our go-forward strategy will be," Mallett said.